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NC Budget and Tax Center, Poverty and Income Data 2013

Social SecurityAccording to data released last week by the U.S. Census Bureau, in 2013 the percentage of older adults (65+) whose incomes fall below the federal poverty threshold is lower than it is for children and non-elderly adults. 1 in 10 (10% exactly) older adults in North Carolina lived in poverty in 2013, compared to 17.9% of the state’s population overall and 25.2% of children. The percentage of North Carolina’s older adults living in poverty in 2013 is one percentage point higher than it was in 2007 when the recession hit.

The reason for the comparatively low rate of poverty amongst older adults is plain and simple – Social Security. Established in 1935, this relatively simple and universal public program continues to accomplish its primary purpose of providing basic economic security for older Americans. Read More

NC Budget and Tax Center

Legislative leaders are seeking to further reduce and eliminate North Carolina’s personal income tax, despite the fact that such a plan would make the state’s tax system more regressive by shifting the tax load onto those least able to afford it. Broadly speaking, this tax shift would have huge implications for North Carolina’s low- and middle-income residents, as a new NC Budget and Tax Center report shows.

But as Dave Ribar, an economist at UNCG, points out in his blog Applied Rationality, older adults would be disproportionately impacted by the Civitas/Laffer/Senate plan that calls for elimination of the state’s personal income tax.

Tax policies that benefit older adults by reducing the taxes that they pay—such as the exemption of social security income, partial exemption of pension income, and higher standard deduction—would go away with the elimination of the state personal income tax. Spending patterns are also unique for the average retiree, argues Ribar. An increased reliance on the regressive sales tax would hit retirees harder because they spend a greater share of their retirement income on consumption items—particularly items such as food and prescriptions that would be newly taxed at the state level under this plan. Read More